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Measure the cornstarch, chili powder, onion powder, garlic powder, ground black pepper, and salt into a mixing bowl. Whisk to combine. Pour in the milk and whisk until no lumps remain.
Add the chicken and toss well to coat.
Next, add enough vegetable oil to a heavy-bottomed pot so that there are two inches of oil. Bring the temperature of the oil up to 350 degrees. Once the oil is hot enough, fry the chicken in batches until the chicken turns a golden brown colour.
Once each batch of chicken is fried, remove it from the pot and place it onto a paper towel-lined plate.
Measure the water and cornstarch into a large skillet and whisk until the cornstarch is dissolved.
Next, whisk in the honey, soy sauce, vinegar, and sesame oil.
Over medium heat, stir and cook the sauce until thickened. This should take about 3-5 minutes.
Add the fried chicken and the toasted walnuts to the skillet. Toss well to coat and cook for another 1-2 minutes or until the sauce has adhered to the chicken.
Plate and garnish with sesame seeds and chopped fresh green onions. Enjoy!